Every timemarkets fell in early 2026, retail traders bought. Every time volatilityspiked, they added to positions. By mid-February, that habit had produced datathat Scott Rubner, head of equity and equity derivatives strategy at CitadelSecurities, described as unlike anything the firm has seen since it startedtracking flows in 2017."Netnotional on our platform has reached levels we have never observedbefore," Rubner wrote in a note to clients last week. "The magnitude,persistence, and breadth of buying activity have materially exceeded priorpeaks, underscoring retail's role as a primary source of incremental demand inearly 2026."FromJanuary 2 through February 13, average daily dollar demand for US equities onCitadel's platform was running about 25% ahead of the previous high from 2021and nearly double the average posted across the entire 2020-to-2025 period. Putdifferently: the retail surge that defined the pandemic era is no longer thebenchmark. A new one has replaced it.CFD Market Is BoomingThesedevelopments arrive just as the CFD and retail brokerage industry had beenheading into 2026 with unusual momentum. Active CFD accounts globally crossed 6million at year-end, climbing 14.6%in the fourth quarter despitethe seasonal slowdowns that typically weigh on client activity during thatperiod. The growthtrajectory shows no signs of plateauing. FMIntel estimates suggest totalindustry monthly volume across tracked retail brokers could surpass $37.3trillion in 2026, based on a 25% forward CAGR projection. Notably, that figure isour conservative baseline.[#highlighted-links#] The actualcompound annual growth rate across the prior five years ran closer to 40%,meaning the realized outcome could comfortably exceed those projections ifretail participation continues at its current pace.Thattrajectory assumed retail participation would continue expanding. Whether itdoes now depends in part on what happens to a buy-the-dip reflex that has neverfaced this particular combination of threats at the same time.Retail Bought the AISelloff TooMuch of thebuying came as a direct response to AI-driven market weakness. When Anthropicrolled out a productivity tool aimed at corporate legal teams, shares in legalsoftware and publishing companies dropped. Wealth management stocks followedafter Altruist Corp introduced a competing tax-strategy offering, dragging downCharles Schwab Corp. and LPL Financial Holdings Inc. in the process. Hedgefunds, meanwhile, were heading the other way, Goldman Sachs noted thatinstitutional short positions hit record levels during the same stretch ofselling. Retail investors absorbed the supply.Theirappetite extended well beyond technology. Citadel's year-to-date data showsretail money flowing into materials, real estate, financials, communicationservices and industrials, a broadening that suggests the group was huntingvalue across the board, not just defending tech positions. Vanda Researchdescribed the behavior as investors being "conditioned to buyweakness," with the implication that the pattern may now act as aninformal price floor across equity markets.Options Activity Signals aStructural ShiftThederivatives market tells the same story at a larger scale. Average dailyoptions volume in 2026 has been running nearly 50% above the 2020-to-2025baseline and more than 15% ahead of last year's pace, according toCitadel's data. "Retailoptions investors have skewed toward net buying in 41 of the past 42 weeks, aconsistency that points to sustained risk appetite rather than sporadicpositioning," Rubner wrote.The surgewasn't isolated to a single platform. Trading volumes on Public, a retailinvestment app, jumped 304% year-over-year during January's tariff-relatedmarket dip, offering a clear view of how quickly retail capital mobilizesaround weakness. That activity fed directly into a broader growth story acrossthe retail brokerage industry. Accordingto data tracked through FMIntel, Finance Magnates' newly launchedmarket intelligence portal, available for free registration, retail CFD volumessurged through the final months of 2025, with five firmscrossing the $1 trillion monthly volume threshold in Q4 alone. Three months earlier,only IC Markets, IG Group and EC Markets had cleared that bar.Tariff Ruling Hands thePattern Its Hardest TestTheenvironment retail traders now face looks very different from the selloffs theyhave absorbed. On Friday, the Supreme Court voted 6-3 to invalidate the tariffsTrump had imposed under the 1977 International Emergency Economic Powers Act,ruling that the statute did not give the president authority to set leviesunilaterally. Trump responded within hours, signing an executive orderreplacing them with a 10% global tariff through a separate legal pathway. BySaturday, he had raised that figure to 15%, the statutory maximum under theprovision he invoked, via a post on Truth Social. The new levies expire after150 days unless Congress extends them, and legal challenges are alreadyanticipated.Thatsequence creates a different kind of uncertainty from what dip-buyers havenavigated before. An AI-driven selloff or an earnings disappointment has aclear narrative and a recoverable bottom. A tariffregime that has been partially invalidated, replaced under contested legalauthority, and faces a potential second round of litigation does not offer thesame clarity.This article was written by Damian Chmiel at www.financemagnates.com.